1 1 (May 26, 2020)

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               Researh Sevice

HEROES Act (H.R. 6800): Selected Consumer

Loan Provisions

May 26, 2020
The economic impact of the Coronavirus Disease 2019 (COVID-19) pandemic has been largely due to
illnesses, quarantines, social distancing, local stay-at-home orders, and other business disruptions.
Consequently, many Americans have lost income and face financial hardship.
On May 15, 2020, the House passed the HEROES Act (H.R. 6800), a wide-ranging COVID-19 relief bill.
This Insight discusses selected provisions in Division K, Title IV related to consumer loans and the
financial services industry.


Many consumers have had trouble paying their loan obligations, such as mortgages, student loans, auto
loans, and credit cards. For this reason, loan forbearance has become a common form of relief offered by
lenders to consumers (borrowers) during the COVID- 19 pandemic. Loan forbearance plans are
agreements allowing borrowers to reduce or suspend payments for a short period of time, providing
extended time for consumers to become current on their payments and repay the amounts owed. These
plans do not forgive unpaid loan payments and tend to be appropriate for borrowers experiencing
temporary hardship.
Another COVID-19 relief bill, the Coronavirus Aid, Relief. and Economic Security Act (CARES Act; P[_.
116-136) enacted on March 27, 2020, establishes consumer rights to be granted forbearance for federally
backed mortgages (Section 4022) and federal student loans (Section 3513). The CARES Act also protects
the credit histories of consumers with forbearance agreements (Section 4021). It does not grant consumers
these rights for other loans owed to private creditors, such as auto loans, credit cards, private student
loans, and nonfederally backed mortgages. In these cases, financial institutions have discretion about
when and how to offer loan forbearance or other relief options. Therefore, a consumer's ability to access
these options and protect their credit history may vary. For more information, see CRS Report R46356,
COVID 19: Consumer Loan Forbearance and Other Relief Options, coordinated by Cheryl R. Cooper.

                                                               Congressional Research Service

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